Investing in solar panels is one of the smartest ways to cut down on energy bills and reduce your carbon footprint. But while solar power is a great long-term investment, the initial cost of installation can be a challenge for many homeowners and businesses.
Fortunately, the UK government and various funding bodies offer grants, incentives and schemes to help reduce the cost of solar panel installations. Whether you're a homeowner, business owner or part of a public sector organisation, there are financial support options to make going solar more affordable.
Let’s break down the top solar grants, incentives and funding schemes available in the UK to help you navigate your options and take the next step towards cleaner, cheaper energy
Energy Company Obligation (ECO4) Scheme
The Energy Company Obligation (ECO4) scheme is a government initiative designed to help low-income households improve their energy efficiency. Funded by major energy suppliers, this scheme provides financial support for solar panel installation, insulation and other energy-saving improvements. ECO4 prioritises a whole-house approach, ensuring that multiple energy efficiency measures are implemented to bring significant energy savings.
Who is eligible?
- Homeowners who receive certain government benefits, such as Universal Credit, Housing Benefit, or Pension Credit.
- If you own a property with a low energy efficiency rating (EPC bands D to G).
- Have had a home assessment that confirms the need for solar panels and other energy-saving measures.
How to apply
Contact your energy supplier or local authority to check your eligibility. After an assessment is carried out to determine if solar panels are the appropriate energy efficiency improvement for your property, they will be installed at no upfront cost.
Home Upgrade Grant (HUG2)
The Home Upgrade Grant (HUG2) is aimed at homeowners in off-gas grid properties who need financial support to improve energy efficiency. This scheme funds solar panel installations, insulation and low-carbon heating systems to help reduce energy costs.
Unlike some other grants, HUG2 specifically supports homes that rely on expensive fuel sources such as oil, coal or electric heating. By offering fully funded solutions, this grant helps rural and off-grid homeowners reduce energy costs, improve home comfort and move closer to achieving net zero.
Who is eligible?
- Own a home that is not connected to the mains gas grid.
- Be a low-income household or in fuel poverty (£36000 threshold).
- Have a property with an EPC rating of D, E, F or G.
How to apply
Check in with your local council to see if they are participating in the scheme. If they are and you are also eligible, you should be able to get an energy assessment to determine and approve solar panel installations to your property.
Smart Export Guarantee (SEG)
Whilst it’s not necessarily a government grant, the Smart Export Guarantee (SEG) is an incentive for homeowners with solar panels to sell excess electricity back to the grid. Energy suppliers pay homeowners for the extra solar energy they generate, providing an ongoing financial benefit that softens the blow of the upfront costs involved.
Who is eligible?
- Homeowners with a solar PV system up to 5MW capacity.
- Your solar system must be installed by an MCS-certified installer.
How to apply
Simply contact your supplier to check on their SEG rates. After that, you can set up an SEG export tariff after installing your solar system.
Additional government funding support for solar panels
Alongside grants and incentives, there are a couple of extra government-backed schemes that can help bring down the cost of solar panel installation. One of the simplest is the 0% VAT on solar panels, which has been extended until March 2027. This means you automatically save 20% on installation costs, with no applications or waiting, just instant savings when you go solar. Perfect if you don’t qualify for a grant but still want to cut your energy bills and reduce your carbon footprint.
If you're in Scotland, you’ve got an extra funding option. The Home Energy Scotland Grant and Loan Scheme offers up to £6,000 in grant funding, plus access to a low-interest loan if you need help covering the rest. It’s a great way to make the switch to solar without stretching your budget too far.
Making solar power more affordable for all
With energy costs on the rise and a growing push for sustainability, there’s never been a better time to invest in solar power. Thanks to a range of government grants, incentives and tax breaks, switching to solar has become more affordable for homeowners, businesses and public sector organisations alike. Whether you qualify for ECO4 or HUG2, want to take advantage of SEG payments, or simply benefit from the 0% VAT rate, there are plenty of ways to reduce the upfront cost and maximise your savings.
By making the most of these funding options, you can lower your electricity bills, increase your energy independence, and reduce your carbon footprint, all the while future-proofing your home against rising energy prices. If you're ready to explore your solar options, now’s the time to take that next step towards a cleaner, greener and more cost-effective energy future by downloading our catalogue below.
